Tag Archives: California

California to issue IOU’s

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Tell Arnold to make them eligible for payment of state taxes and they can forever use the IOU’s for state purchases in place of $US

July 1 (Reuters) — California prepared on Tuesday to resort to issuing IOUs as the giant but cash-strapped U.S. state struggled to approve a new budget in time for the new fiscal year that begins on Wednesday.

The IOUs, which are notes promising payment to vendors and local agencies, or shutting down some public services, are among measures that California and other states may have to rely on as they contend with staggering budget gaps caused by the U.S. recession.


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California

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Rather than let the states cut essential services and lay off employees with unemployment over 9%, I would give all the states an immediate $500 per capita distribution from the federal government.

It is the same voters and the same taxpayers, so per capita is the way to go.

This gives California most of what it needs and also gives the other states the same per capita distribution to use as desired.

That way it is equitable and helps support aggregate demand during this obvious shortfall.

Calif. Aid Request Spurned By U.S.

Officials Push State To Repair Budget

By David Cho, Brady Dennis and Karl Vick

June 16 (Washington Post)— The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy — the state of California.

Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching “fiscal meltdown” caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California’s fiscal condition has worsened, leading to high-level administration meetings. But federal officials are worried that a bailout of California would set off a cascade of demands from other states.

The administration is worried that California will enact massive cuts to close its deficit, estimated at $24 billion for the fiscal year that begins July 1, aggravating the state’s recession and further dragging down the national economy.

After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout.

“After June 15th, every day of inaction jeopardizes our state’s solvency and our ability to pay schools and teachers and to keep hospitals and ERs open,” Gov. Arnold Schwarzenegger (R) said Friday.

California’s budget is also heavily dependent on taxes paid on capital gains and stock options, which have been clobbered during the meltdown of financial markets. State budget analysts made their annual estimate of revenue a month before the crisis spiked in the fall and have been backpedaling ever since.

Consider capital gains — income from sales of stocks or other assets. In California, that income dropped to $52 billion in 2008 from $130 billion a year earlier. It is estimated to be $36 billion this year.

By February, the shortfall was projected at $42 billion over two years.

To close an annual gap now put at $24 billion, Schwarzenegger and leaders of the legislature’s Democratic majority have put aside talk of tax increases to concentrate on cuts.

“A lot of the burden,” Geithner said, “is going to be on them to lay out a path that gets their deficits down to the point where they’re going to be able to fund themselves comfortably.”


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California housing data

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Quote from Data Quick:

Record January sales totals in Perris, Temecula, Victorville and Fontana in the Inland Empire. Palmdale in Los Angeles County posted a record total in January, and record January sales totals also were achieved in Chula Vista and Lemon Grove in San Diego County and Oxnard in Ventura County.

I just checked the numbers from the 2005-2006 highs per the C.A.R. and compared to today’s release.

California housing Data

City 12/05-06 1/09 % decline
Palmdale 377K 135K 64%
Perris 384K 151K 60%
Temecula 510K 250K 51%
Victorville 330K 132K 60%
Fontana 460K 209K 54%
Lemon Grove 419K 209K 54%
Chula Vista 545K 324K 40%
Oxnard 617K 259K 58%
Entire State of California 568K 254K 54%

State’s existing home sales increased 100.8 percent

For release: Thursday, Feb 26 2009

Quick facts

  • Existing, single-family home sales increased 100.8 percent in January to a seasonally adjusted rate of 624,940 on an annualized basis.
  • The statewide median price of an existing single-family home decreased 40.5 percent in January to $254,350.
  • C.A.R.’s Unsold Inventory Index was 6.7 months in January, compared with 16.6 months in January 2008.
  • The median number of days it took to sell a single-family home was 49.9 days in January 2009, compared with 70.8 days in January 2008

C.A.R. reports sales increased 100.8 percent; median home price declined 40.5 percent in January

LOS ANGELES (Feb. 26) – Home sales increased 100.8 percent in January in California compared with the same period a year ago, while the median price of an existing home fell 40.5 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Statewide sales in January edged past the 600,000 threshold for the first time since October 2005,” said C.A.R. President James Liptak. “The strength in California home sales in recent months signifies that the market is gradually working its way through the large numbers of distressed sales that have followed in the wake of the troubled mortgage problem. With favorable home prices and historically low mortgage rates, affordability in the California housing market is now at its highest since the start of the decade.”

Closed escrow sales of existing, single-family detached homes in California totaled 624,940 in January at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 100.8 percent from the revised 311,160 sales pace recorded in January 2008. Sales in January 2009 increased 14 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during January 2009 was $254,350, a 40.5 percent decrease from the revised $427,200 median for January 2008, C.A.R. reported. The January 2009 median price fell 9.5 percent compared with December’s revised $281,180 median price.

“A lot of attention has rightfully been directed toward the high number of distressed properties,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “California’s housing market also is feeling the effects of a drought in the availability of jumbo mortgage loans.

“Since the start of the credit crisis in 2007, jumbo lending has been severely constrained to the point where markets that rely on jumbo loans experienced a 24 percent year-to-year decline in sales in the month of January. This stands in contrast to the 100 percent sales gain the overall market experienced,” she said.
Highlights of C.A.R.’s resale housing figures for January 2009:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in January 2009 was 6.7 months, compared with 16.6 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 5.05 percent during January 2009, compared with 5.76 percent in January 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.92 percent in January 2009, compared with 5.23 percent in January 2008.

. The median number of days it took to sell a single-family home was 49.9 days in January 2009, compared with 70.8 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, none of the 331 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 list is generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for January may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/economics/historicalprices/2009medianprices/jan2009medianprices.

.. Statewide, the 10 cities with the highest median home prices in California during January 2009 were: Santa Barbara, $939,250; Redondo Beach, $672,500; Pleasanton, $655,000; San Clemente, $602,500; San Ramon, $582,000; Yorba Linda, $566,750; San Francisco, $561,000; Huntington Beach, $555,000; Encinitas, $550,000; and Sunnyvale, $530,000.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

January 2009 Regional Sales and Price Activity*-Regional and Condo Sales Data Not Seasonally Adjusted

Median Price Jan 09 Percent Change in Price from Prior Month Dec 08 Percent Change in Price from Prior Year Jan 08 Percent Change in Sales from Prior Month Dec 08 Percent Change in Sales from Prior Year Jan 08
Statewide
California (sf) $254,350 -9.5% -40.5% 14.0% 100.8%
California (condo) $218,960 -7.2% -41.0% -18.3% 58.2%
C.A.R. region
High Desert $127,750 -7.1% -45.5% -10.5% 234.6%
Los Angeles $305,310 -9.4% -35.0% -7.1% 84.7%
Monterey Region $263,540 -9.1% -54.6% -23.0% 132.7%
Monterey County $230,000 -9.8% -54.5% -21.6% 213.5%
Santa Cruz County $450,000 -1.1% -25.7% -27.8% 20.3%
Northern California $259,920 -4.5% -17.3% -19.8% 10.0%
Northern Wine Country $331,150 -3.8% -32.4% -21.0% 85.8%
Orange County $423,100 -4.4% -32.7% -25.9% 79.1%
Palm Springs/Lower Desert $153,150 -9.8% -52.1% -11.8% 51.0%
Riverside/San Bernardino $175,200 -8.2% -41.2% -20.6% 149.4%


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AP: California home sales up big

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Just annecdotal, but guaranteed that if they were down that much it would be all over the news:

Home sales in California jump nearly 27 percent

by Jordan Robertson

SAN JOSE, Calif. (AP) – Home sales in California jumped nearly 27 percent from March to April as bargain hunters found it easier to get loans and pick up property on the cheap.

DataQuick Information Systems released statewide numbers Tuesday, after reporting similarly positive figures for the San Francisco Bay area, which saw a nearly 29 percent jump during the same period.

But home prices continue to drop around California, a sign that home owners are still finding it hard to unload their properties without steep discounts.
The median price paid for a home last month was $353,000 — down 1.1 percent from the month before and down nearly 27 percent from the year-ago period.

A total of 31,150 new and resale houses and condos were sold statewide last month.

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Washington Mutual to take writedown, cut jobs

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Yet another shoe that didn’t fall. No business interruption, no change to aggregate demand, a relatively few layoffs over time, and this is a major California lender where housing is hurting perhaps the most of any state.

Washington Mutual to Take Writedown, Cut Jobs (Update1)

2007-12-10 17:00 (New York)

(Adds writedown in the first paragraph and downgrade in the third paragraph.)
By Elizabeth Hester

Dec. 10 (Bloomberg) — Washington Mutual Inc., the largest U.S. savings and loan, will write down the value of its home lending unit by $1.6 billion in the fourth quarter and cut 3,150 jobs as losses in the mortgage market increase.

Washington Mutual also will cut its quarterly dividend to 15 cents a share from 56 cents and close 190 of 336 home loan centers, the Seattle-based bank said in a statement today. The company said provisions for loan losses in the quarter will be $1.5 billion to $1.6 billion, about twice as much as it previously expected.

Fitch Ratings downgraded the firm’s rating to “A-” from “A,” citing “worsening asset quality,” and “extremely challenging conditions in the U.S. residential mortgage market.” Washington Mutual said it plans to raise $2.5 billion to shore up its capital by selling convertible stock.

Industry-wide mortgage originations will probably shrink 40 percent in 2008 to $1.5 trillion, down from about $2.4 trillion this year, Washington Mutual said in the statement. The firm plans to cease lending through its subprime mortgage channel.

The company said it would cut 2,600 jobs in its home loans unit, or about 22 percent of that division. The remaining job cuts will come from corporate and support staff, the statement said.

–Editor: Otis Bilodeau.

To contact the reporter on this story:
Elizabeth Hester in New York at +1-212-617-3549 or ehester@bloomberg.net.

To contact the editor responsible for this story:
Otis Bilodeau at +1-212-617-3921 or obilodeau@bloomberg.net.

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